The FINANCIAL — The current volume and term structure tendency of commercial bank loans including those overdue shows that there has been an increase in unpaid loans, which can lead to economic debt, according to National Bank of Georgia.
The statistics show that the volume of loans in arrears has amounted to GEL 25,301,550 thousand in the first three months of 2013, while it was a little bit less in the same period of 2012 – at GEL 23,287,694 thousand.
For the whole of 2012, the volume of loans in arrears reached GEL 98,591,927 thousand. That year the statistics showed an increase again compared to the previous year as in 2011 the debt consisted of GEL 82,449,277 thousand and in 2010 – GEL 68,016,081 thousand.
In total, loans with fixed maturities have amounted to GEL 24,369,275 thousand in the first three months of 2013, compared to GEL 94,894,246 thousand in 2012 and GEL 79,324,647 in 2011. Out of this amount, short-term loans have come to GEL 5,780,506 thousand in 2013, compared to GEL 22,487,423 thousand in 2012 and GEL 19,530,871 thousand in 2011. As for long-term loans, they have amounted to GEL 18,588,770 thousand so far in 2013, but were GEL 72,406,823 thousand in 2012 and GEL 59,793,776 thousand in 2011.
Out of commercial bank loans, the amount of overdue loans consisted of GEL 652,960 thousand in the first three months of 2013, compared to GEL 2,536,014 thousand in 2012 and GEL 2,148,605 thousand in 2011. Among them, short-term overdue loans were GEL 374,615 thousand in 2013, GEL 1,379,206 thousand in 2012 and GEL 1,101,865 thousand in 2011. As for the amount of long-term overdue loans, their amount has reached GEL 278,344 thousand so far in 2013, compared to GEL 1,156,808 thousand in 2012 and GEL 1,046,741 thousand in 2011.
Accrued interest has reached GEL 279,315 thousand in 2013, whereas it was GEL 1,161,668 thousand in 2012 and GEL 976,025 thousand in 2011 including accrued interest on short-term loans as well as on long-term loans.
Total loans including overdue loans in the national currency have amounted to GEL 8,107,012 thousand in 2013, compared to the GEL 31,530,594 thousand in 2012 and GEL 23,319,677 thousand in 2011. This is the total data of loans with fixed maturities, overdue loans and accrued interest.
Total loans including overdue loans in a foreign currency have amounted to GEL 17,194,538 thousand so far in 2013, whereas their number was GEL 67,061,333 thousand in 2012 and GEL 59,129,600 thousand in 2011. This data includes loans with fixed maturities, overdue loans and accrued interest.
“Customers often encounter difficulties in covering loans when they are not structured properly,” said Levan Lebanidze, the General Director of Bank Constanta. “Sometimes a loan can become problematic even though it was structured well at the start. In cases like this, Bank Constanta’s policy is to be as flexible as possible. We listen to the client, study the case, find the reasons for the problem and then make a decision accordingly. We do our best to support our clients and to help them cover the loan as it is in our interests to be able to rescue their business,” he added.
“Before sorting out the most problematic loans, I would like to mention that what’s very important is first of all, the procedure of giving out a loan. This procedure requires a high level of responsibility from the side of the financial institution as well as from the customer. It is very important to find out how knowledgeable the customer is before taking on a loan. We pay a great deal of attention to the correct structuring of loans and correctly choosing clients. We do not give out a loan if we are not assured that this loan will be used to develop a specific business and that this business will then be able to cover the repayment of the loan,” Lebanidze added.
“In the event a customer does encounter difficulty in repaying a loan, Bank of Georgia can offer them the option of debt restructuring,” said Khatuna Kakabadze of Bank of Georgia. “Debt restructuring means offering the borrower a more convenient payment plan to cover the debt. We offer them a new loan that replaces the outstanding balance on the older loan, and is paid over a longer period, usually with a lower instalment amount. Our priority is for the borrower to be able to cover the loan,” she added.
“The statistic of inactive loans at Bank of Georgia is stable,” Kakabadze said. According to her, the ratio of inactive loans to the total loan portfolio was 3.7 percent in 2011 and 3.9 percent in 2012.
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